Billing concerns

Recently had a phone replaced, still under warranty. Unfortunately, was charged $259 because I was informed the phone replaced had water damage. When initially inquired about replacing the phone, the rep made sure to have me check to make sure no water damage existed. None existed. Somewhere between the call and when the phone was returned to ATT, water damage apparently was discovered. ATT took pictures to protect themselves, revealing nothing being tampered. So I am left with this large bill, apparently with no recourse.

Any ideas?